Crash, freefall, and wishful thinking

The independent indulges in wishful thinking, which is about as close as we get to a bubble bloater this days. "Crashes aren't good for us but at least we'll find the floor. And by 2010 we could be looking up." After this blag is over, Banks will shy away from mortgages for a generation. There will be no recovery. Remember that - NO HOUSING MARKET RECOVERY. If there is, I will eat my hat.

"We were never going to have a soft landing. This is a crash in the housing market. Look at what is happening to price, to transactions [volume], to building activity." Dr Alan Ahearne, economics lecturer at the National University of Ireland, Galway.

Absurbity layered upon incompetence: "Northern Rock is using aggressive debt recovery tactics which are putting at unnecessary risk the homes of people struggling to pay back loans, say debt advice experts. The bank is rushing to take court proceedings against defaulters and is unsympathetic when borrowers try to negotiate repayment deals to avoid their homes being repossessed."

"Homeowners struggling to meet their mortgage payments would be able to sell their homes to the local authority and rent them back as tenants under radical proposals being considered by the government to prevent the misery of repossession."

The misery of repossession would be transformed into a massive loss for local authorities. Any house sold today will be worth less in a year and a lot less in five years time. Who will cover this loss? The local authority? The council tax payer?

I mean, things eventually came back after 1929! I would say the present opaque securitisation of debt and massive use of leverage is much like buying shares on margin was then - just things which has to be restricted by regulation, and then things eventually work again.

Even if it takes a world war or something like that, surely the markets will all come back; even if it takes a decade

Is this really, really the end? Have I missed something in the New Testament?